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Foreign investor receives penalty for not getting approval
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The Federal Court of Australia has issued the first civil penalty order for breaches of Australia’s foreign investments rules with $250,000 in penalties. A foreign investor was penalised for purchasing multiple properties without receiving approval from the Foreign Investment Review Board (FIRB).
FIRB identified the purchases as part of our compliance approach to detect foreign investors in breach of the foreign investment rules.
Foreign investors are limited in the type of residential property they can acquire in Australia and must apply for FIRB approval prior to purchasing Australian residential real estate. Once approved, the purchase must be registered using the Land and Water Registration Form no later than 30 days after the date of settlement. There is no cost involved in registering.
Investors found to be in breach of Australia’s foreign investment rules face penalties equal to the amount of capital gain or 25% of the value of the property, whichever is greater.